THURSDAY MARKET CLOSE: Further deal talk leaves Footsie flat

London’s top flight ended the session almost flat after a busy day of corporate news and smoke-filled room dealmaking.

Reports that British American Tobacco could back a potential merger between Reynolds American and Lorillard in a complicated, three-way transaction boosted the sector, but the chances that AstraZeneca will return to sale talks slipped further.

The Footsie closed just 0.48 of a point lower at 6,820.56.

Chris Beauchamp, market analyst at IG, said: “The FTSE 100 has endured something of a seesaw day, hopping between gains and losses, but the overall impression has been of a market in a more relaxed frame of mind than was the case earlier in the week.”

AstraZeneca’s rollercoaster ride continued as it was claimed that US investment giant BlackRock was backing the board’s decision to spurn Pfizer’s £55-a-share offer. The stock was down more than 3 per cent at 4,275p.

Royal Mail also dragged on the index despite meeting profit expectations. It was the biggest faller on the main market, down 9.7 per cent or 56p at 519p after chief executive Moya Greene warned about “increasing challenges” in its letters and parcels businesses.

Brewing giant SABMiller topped the risers’ board as it announced a 2 per cent rise in pre-tax profits and reassured investors over its performance in developing markets. Shares were 112.5p higher at 3,372p.

Outside the top flight, shares in Mothercare surged 16.7 per cent – up 23.3p to 162p – after it said a recovery in fourth-quarter trading had continued into the current period.

Car parts and bicycles retailer Halfords gained 10.6 per cent, up 46.6p to 488p, after its pre-tax profit accelerated slightly to £72.8 million, beating market expectations.